How reliable are companies’ credit ratings?

What is a financially safe company? Is it one that is nearly debt-free and earns over 20 per cent returns on capital employed (RoCE) in its business; or one with a debt-to-equity ratio of around one and of around 10 per cent? Or is it a company with the leverage ratio of more than three and RoCE in a low single digit? If in India are to be believed, all three are equally safe with little or no chance of default on their debt.

Read full post

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s